Freezone Business Setup in UAE

A Freezone Business Setup refers to starting your company in a special business area called a “Freezone” in the UAE. These zones are made to attract foreign investors by offering benefits like full ownership (100% foreign ownership), no import/export taxes, and simplified setup rules.

You can choose a Freezone based on your business type, like trading, services, media, or tech. Each Freezone has its own regulations, costs, and license types. It’s a popular option for people who want to start a business in UAE without needing a local partner.

However, business setup in freezone generally cannot trade directly in the UAE mainland without appointing a local distributor or opening a mainland branch. Not sure whether to choose a Freezone or Mainland setup? Learn the key differences here

Many people who want to start a company in UAE choose Free Zones. Here’s why setting up a business in a UAE Free Zone is a smart move:

• 100% Ownership: Free zones allow full ownership without a local partner.
• Tax Position: 0% tax applies only if QFZP conditions are met; otherwise 9% applies.
• Customs Exemption: No customs duty on re-exports; duties apply if goods enter the mainland.
• Quick Setup: Company registration is fast, with licenses issued in 1–3 days and minimal paperwork.
• Office Options: Modern offices, warehouses, flexi-desks, and co-working spaces are available.
• Visa Support: Easier visa processing for owners and employees, based on office size and zone rules.
• Industry Focus: Many free zones are designed for specific business sectors.
• Privacy: Company and owner details are generally kept confidential.
• Repatriation: 100% of capital and profits can be repatriated without restrictions.
• These good points make starting a business in UAE Free Zones very appealing to many.

Choose the right UAE Freezone to match your business goals, budget, and activity type:

• For Tech & Online Shops:

  • Dubai Internet City (DIC): A top spot for technology companies.
  • Dubai CommerCity: Specializes in online selling, offering full e-commerce support.
  • Dubai Silicon Oasis (DSO): Good for tech, new ideas, and smart city projects.
  • IFZA (International Free Zone Authority): Very popular for online shops, advice-giving (consulting), and trading. It’s known for good prices and an easy process.
  • Dubai Multi Commodities Centre (DMCC) – Voted “Global Free Zone of the Year” multiple times, ideal for commodities, crypto, and fintech businesses.

• For Media & Creative:

  • Dubai Media City (DMC): For media, advertising, and making content.
  • Dubai Production City (DPC): For printing, publishing, and media creation.
  • Fujairah Creative City (FCC): Known for cheaper licenses for media and service businesses. You can often set up from far away.
  • Twofour54 (Abu Dhabi) –A creative hub offering world-class media production facilities, attractive for global content creators.

• For Buying, Selling & Moving Goods:

  • Jebel Ali Free Zone (JAFZA): One of the biggest and oldest free zones. Excellent for heavy trading, moving goods, and making things, especially because it’s right by a big port.
  • Dubai Airport Free Zone (DAFZA): Great for air cargo and valuable goods. It’s close to Dubai International Airport.
  • Sharjah Airport International Free Zone (SAIF Zone): Very good for trading, making things, and logistics, with airport access and warehouses.
  • Hamriyah Free Zone (HFZA) – Popular for heavy industries, manufacturing, and oil & gas trading.

• For General Trading & Services (Budget-Friendly):

  • Ras Al Khaimah Economic Zone (RAKEZ): Offers different packages for many business types and is known for being good value for money.
  • Ajman Free Zone (AFZ): One of the older, cheaper Freezones, good for many activities.
  • Umm Al Quwain Free Zone (UAQ Free Zone): Offers many different business types and low setup costs, especially for importing and exporting.

Example: For businesses focused on trading and warehousing, Sharjah Freezone license offers affordable packages with excellent logistics access.

• For Money & Banking Businesses:

  • Dubai International Financial Centre (DIFC): A leading place for finance, with its legal system. Perfect for banks, investment firms, and money services.
  • Abu Dhabi Global Market (ADGM): Another big financial Freezone with its own special legal rules.

• Newer & Special Freezones (From 2025):

  • RAK Digital Assets Oasis (RAK DAO): The world’s first Freezone just for digital money and virtual asset companies (like Web3, blockchain, crypto).
  • Expo City Dubai Free Zone: Uses the old Expo 2020 site, focusing on green ideas, new inventions, and future industries.

As is clear from the options above, most best Free Zones options are available in Dubai, which is why most entrepreneurs go for a company formation in Dubai. If you are looking for the most affordable Freezone options in UAE, check our detailed guide on the cheapest Freezones in UAE

Choosing the right business setup in UAE Freezone is a key step for your business success. Each Freezone has its own rules, costs, and focus industries. Here’s how to decide:

1. Business Activity: Choose a Freezone aligned with your activity, some activities need external regulatory approvals.
2. Location: Pick a Freezone close to your target market, suppliers, or transport hubs.
3. Costs: Compare setup fees, renewal charges, office rent, and visa limits.
4. Office Requirements: Check whether virtual office or physical space are required.
5. Visa Options: Review visa quotas based on your staffing needs.
6. Banking & Reputation: Some Freezones have smoother corporate bank account access.
7. Ownership & Structure: Ensure the Freezone supports 100% foreign ownership and your preferred structure.
8. Tax Residency: Select a Freezone that meets FTA tax residency requirements if needed.
9. Dual Licensing: Some Freezones allow mainland trading through dual licenses.
10. Ecosystem & Networking: Industry-focused Freezones support collaboration and growth.

Example: Some business activities, such as retail or local contracting, require a Dubai Mainland license instead of a Freezone license.

By comparing these factors, you can pick the Freezone that helps your business grow faster and operate smoothly. Looking for the best Freezone in UAE for your industry? Explore our top picks here

Here is a step-by-step guide that explains everything you need to know to register your Freezone business smoothly.

Step 1: Select the Right Freezone

There are over 40 Freezones [Jebel Ali Free Zone (JAFZA), RAKEZ, and more] in the UAE, and each one is tailored to different types of businesses. Some Freezones are located near ports or airports and are ideal for trading and logistics, while others support sectors like fintech, healthcare, or e-commerce.

When choosing a Freezone, consider the following factors:

• Type of business activity allowed
• freezone company setup cost and renewing
• Availability of office space or flexi-desk options
• Visa quota based on office size
• Proximity to clients or suppliers
• Bank account setup support

Want to know how many Freezones are in the UAE and what each offers? Just Click here

Step 2: Choose the Business Activity

Your business activity determines what type of license you will need. Each Free Zone has an official list of permitted business activities such as consulting, trading, manufacturing, e-commerce, and more.

If you’re considering setting up in Jebel Ali Free Zone (JAFZA), check our detailed JAFZA Activity List to see all the approved activities available for Freezone and Offshore companies. This guide helps you choose the right activity and avoid license rejections during registration.

Make sure your selected activity matches what your company will do, as the Freezone license will only allow you to operate within the defined scope.

Step 3: Choose a Legal Structure

Depending on how many shareholders you have, you will need to choose the right legal structure. Common options include:

• Freezone Establishment, for a single shareholder
• Freezone Company, for multiple shareholders
• Branch Office, for existing UAE or foreign companies

Some Free Zones also allow partnerships or holding company setups.

Step 4: Pick and Reserve a Company Name

You must choose a company name that complies with the naming rules set by the Freezone authority. Avoid using any offensive or religious terms, and make sure the name matches the business activity.

Completing trademark registration can also help protect your brand once the name is approved and reserved for your business.

Step 5: Prepare and Submit the Required Documents

The basic documents required for most freezone company registration include:

• Passport copies of all shareholders and directors
• Passport-sized photographs
• Entry visa or UAE residence visa (if applicable)
• Emirates ID copy (if available)
• Business plan or company profile (some Freezones may request it)
• No objection certificate from the current sponsor, if you are already in the UAE

Some Freezones may also ask for proof of address, bank reference letters, or experience, depending on your activity.

Step 6: Apply for Initial Approval

Once your documents are reviewed and approved by the Free Zone authority, you will receive initial approval. This confirms that you can proceed with the freezone company registration.

Step 7: Sign Legal Documents and Lease Office Space

Next, you will be required to sign key legal documents such as the Memorandum of Association and Articles of Association, which outline the rules of your company.

You also need to choose your office space. Options vary by Freezone and include shared desk, flexi desk, private offices, or warehouses.

A lease agreement must be signed between you and the Freezone authority.

Step 8: Pay the Fees and Receive Your License

Once all documents are submitted and the lease is signed, you will pay the applicable registration and license fees. After payment, the Free Zone authority will issue your:

• Business license
• Certificate of Incorporation
• Share Certificate
• Lease agreement
• Memorandum of Association and other legal documents

This completes the official registration process.

Step 9: E-Channel Registration

Before applying for any visas, your company must be registered on the UAE immigration E-channel system. This allows you to sponsor visas for investors, employees, or dependents. It’s a one-time setup, with annual renewal and government fees.

Step 10: Open a Corporate Bank Account

Once you receive your company documents, you can apply for a corporate bank account in UAE. Each bank has different criteria; some may ask for a business plan, office lease, or projected revenues, especially for startups.

Freezones usually assist by introducing you to banks they partner with, but final approval depends on the bank’s internal compliance checks (including KYC and risk assessment).
Documents commonly required include:

• Trade license and incorporation documents
• Shareholder passport copies
• UAE entry/residence visa or Emirates ID (if available)
• Office lease agreement
• Business plan or company profile (for certain activities)

It may take 1 to 3 weeks for the account to be approved, depending on the bank and your business activity.

Step 11: Apply for UAE Residence Visas (Optional)

If your Freezone license allows visas, you can now apply for:

• Investor or partner visa
• Employee visas
• Dependent visas for family members

Note: Not all licenses offer visa quotas, especially for some e-commerce or freelance permits. Always check the visa allowance linked to your license and office type.

The visa process involves medical tests, an Emirates ID application, and visa stamping.

Note:

• freezone company setup cost vary significantly by Freezone and can be lower for packages with no visa or desk requirements. The overall cost to set up a company inUAE depends on serval factors.
• Many Freezones offer bundled packages starting from AED 12,000 for solo entrepreneurs.
• Annual renewal fees are similar to initial licensing and office rent costs.

Get the idea of Dubai Free Zone Company Setup Cost from here.

Having the right papers ready helps your UAE Freezone business setup go smoothly:

• For People (Owners/Managers):

  • Copy of your passport (valid for at least 6 months)
  • Copy of your UAE visa (if you live in the UAE)
  • Copy of your Emirates ID (if you live in the UAE)
  • Passport-sized photos with a white background
  • Proof of where you live (e.g., a recent electricity bill from the last 3 months)
  • Your CV (resume), sometimes asked for by the manager or owners.

• For Companies (If another company owns shares in your new Freezone company):

  • Certificate showing the parent company is registered.
  • The parent company’s main rulebook (Memorandum and Articles of Association).
  • A formal decision paper from the parent company agreeing to set up in the Freezone and naming a manager.
  • A document giving power to the person signing for the parent company (if needed).
  • A paper from the parent company saying it’s in good standing (sometimes).

• For Your New Freezone Company:

  • Filled out application forms from the Freezone.
  • Certificate showing your chosen company name is reserved.
  • The first approval paper from the Freezone.
  • A simple business plan (for some businesses or Freezones).
  • Your company’s rulebook (MOA / AOA),  the Freezone will help you prepare this.
  • Your office lease agreement (given by the Freezone).
  • Specimen signature form.
  • Ultimate Beneficial Owner (UBO) declaration form.
  • No Objection Certificate (NOC) from third parties, if applicable.

Note: Any papers not in Arabic or English might need to be officially translated and stamped.

Business setup in UAE freezone means registering your business in one of the designated economic zones. These zones offer faster setup processes and simpler regulations compared to starting a business on UAE mainland.

Company Types & Licenses

Setting up a company in a UAE Freezone means registering your business in one of the designated economic zones. These zones offer faster setup processes and simpler regulations compared to starting a business on the UAE mainland.

You’ll also need to get a specific license based on what your business will do:

• Commercial License: For buying, selling, importing, and exporting goods. Often called a “trading license.” E-commerce trade licenses are gaining popularity for online sellers, while freelancer permits are limited to approved professional categories like media, education, design, and tech.
• Service License: For offering services (like giving advice, marketing, IT help, accounting, teaching, etc.).
• Industrial License: For making, putting together, packing, or preparing goods, industrial trade licenses are favored.
• Freelance Permit: Many Freezones now offer special permits for single freelancers in certain areas like media, tech, or design. This is perfect for people working by themselves.

Certain Freezones also issue niche licenses such as e-commerce, media, education, and holding company licenses.

Things to Keep in Mind While Choosing a Free Zone in UAE

• Some Freezones don’t offer all structures (for example, some smaller Freezones only allow FZ LLCs).

• Minimum share capital requirements can differ — many Freezones have abolished them, but some still have AED 50,000–150,000 requirements.

• Freezones usually issue shares in AED only (not foreign currencies).

Before deciding on a Freezone, consider setup fees, license renewal charges, office rent, visa limits, and other UAE business setup cost details

While Free Zones offer convenience, they come with some operational restrictions you should know.

1. Restricted Mainland Access: Free Zone companies cannot directly do business in UAE mainland without a local distributor or branch office.
2. Limited Location Choices: You must operate within the Free Zone premises or use approved business centers within the zone.
3. Activity Restrictions: Certain regulated sectors (like finance, healthcare, or media) may require additional approvals or licenses.
4. Different Rules Per Zone: Each Free Zone has its own laws and fee structure, so the setup process and requirements can vary.
5. Visa Limit Based on Office Size: The number of visas allowed is often tied to the size of your office space.
6. Simplified Bank Account Opening: Many Freezones have strong relationships with UAE banks, which can make opening a corporate bank account faster and easier.

Even though Freezones offer more freedom, there are still important legal rules for UAE Freezone business setup that you must follow:

• Real Address: Even with “flexi-desks,” you must have a registered physical address inside the Freezone.
• License Rules: What your business does must exactly match what’s written on your business license. You can’t do other things.
• Company Name Rules: Your company name must follow the Freezone’s rules (e.g., no bad words, it must be unique, and it should show what your business does).
• Company Money: Some Freezones ask you to put a minimum amount of money into a bank for your company, but often it’s just a small amount on paper.
• Company Tax Registration: Even if you pay 0% tax, all Free Zone companies must register with the government tax office (FTA) and send in a yearly tax report. This has been a must-do since 2023.
• VAT Registration: If your yearly business income from certain goods and services is more than AED 375,000, you must register for 5% sales tax (VAT) and send in reports regularly. To understand VAT requirements for Freezone companies in UAE, check our dedicated guide
• Real Business Rules (ESR): If your Free Zone company does certain activities (like being a holding company or doing shipping), you must prove that you have real business operations, assets, and staff in the UAE Freezone.
• Declare the Real Owners (UBO Requirement): You need to tell the Freezone bosses who the actual main owners of your company are. This helps keep things clear.
• Anti-Money Laundering (AML) Rules: Free Zone companies must have ways to stop illegal money activities and report anything suspicious.
• Yearly Renewal: You must renew your business license every year, along with your office space rent and other permits.

With the introduction of Corporate Tax in the UAE (effective from June 1, 2023), Freezone companies must comply with specific tax rules while still benefiting from favourable rates, often 0%, if certain conditions are met.

1. 0% Tax for Qualifying Freezone Persons

Freezone entities can continue to enjoy a 0% Corporate Tax rate on Qualifying Income if they meet the criteria of a Qualifying Free Zone Person. To qualify, a Freezone company must:

• Maintain adequate economic substance in the UAE (real operations, staff, and physical presence).
• Generate income primarily from Qualifying Activities, such as international trading, intra-Freezone services, or holding company activities.
• Not elect to be subject to the regular 9% Corporate Tax regime.
• Comply with arm’s length pricing and transfer pricing rules for transactions with related parties.
• Ensure that income from Non-Qualifying Activities (e.g., direct sales to the UAE mainland without proper structure) remains within allowed limits.

2. 9% Tax on Non-Qualifying Income

If a Free Zone company fails to meet the above conditions or earns income outside the scope of “Qualifying Activities,” that portion of its profit (exceeding AED 375,000) is subject to the standard 9% Corporate Tax rate.

3. Mandatory Corporate Tax Registration

Regardless of the tax rate applicable, all Free Zone companies must register for Corporate Tax with the Federal Tax Authority (FTA).

4. Annual Tax Returns and Audited Financials

All Freezone companies, even those paying 0%, must file annual Corporate Tax returns. From 2025 onward, they are also required to submit audited financial statements to support their tax filings.

UAE Free Zones support a wide variety of business activities, but each Freezone often specializes in specific sectors. This makes Freezones ideal for companies that do not require a direct presence in the UAE mainland. Here are some of the most popular and well-supported activities:

1. E-commerce Businesses

Freezones like Dubai Commerce City and Sharjah Media City are designed for digital trade, making it easy to launch and scale online stores that sell products globally with minimal restrictions.

2. Consultancy & Professional Services

Business advisory, IT consulting, HR, marketing, education, and legal services can be established easily in Free Zones with flexible licensing options and minimal setup costs.

3. Freelancing & Creative Professions

Freezones such as Fujairah Creative City and RAKEZ offer freelance permits for individual professionals in design, writing, software development, media, and education.

4. Import & Export Trading

Free Zones provide ideal logistics support, including warehousing and customs benefits, for businesses involved in general or specialized trading, as well as import/export operations.

Know more about: How to Start an Import Export Business in Dubai?

5. Tech Startups & Software Development

Zones like Dubai Internet City and Abu Dhabi’s Hub71 offer startup-friendly ecosystems, innovation labs, and access to venture capital, perfect for tech and SaaS companies.

6. Media & Content Production

Companies in advertising, film production, publishing, or PR benefit from Free Zones such as Dubai Media City, which provide sector-specific infrastructure and licenses.

7. Education & Training Providers

Free Zones allow businesses offering educational consulting, vocational training, e-learning, and workshops to operate with tailored licenses and visa quotas.

8. Healthcare & Wellness Services

Certain Freezones (especially healthcare-focused ones like Dubai Healthcare City) support medical consulting, wellness coaching, nutrition services, and therapy businesses, subject to activity approval.

9. Manufacturing, Assembly & Packaging

Industrial Freezones permit light manufacturing, assembling parts, and product packaging under industrial licenses. These zones offer facilities and storage for production activities.

10. Holding Companies & Investment Firms

Free Zones also cater to holding structures used to manage assets, shares, or intellectual property, particularly where asset protection and tax planning are priorities.

One of the best things about starting a business in a UAE Free Zone is how fast it is! The usual time is generally very quick:

• Total Timeframe: Most Freezone company setups are completed within 3 to 10 working days. In certain cases, particularly for straightforward applications, the process may be expedited, with some Freezones issuing licenses in as little as 60 minutes.
• Time for Key Steps:
  • Getting Activity & Name Approved: 1-2 days
  • Getting First Go-Ahead: 1-2 days
  • Submitting & Checking Papers: 2-3 days
  • Getting Your License: 1-3 days after everything is processed and paid.
• Potential Causes of Registration Delays:
  • Missing Papers: If any of your documents are not ready or are wrong, it will take longer.
  • Type of Business: Some special businesses (like health, education, or finance) might need extra approvals from other government groups, which can add a few days or weeks.
  • How Fast You Respond: How quickly you or your helper replies to questions from the Freezone.
  • Putting in Company Money: If the Freezone needs you to actually put company money into a bank, this can add time, depending on how fast the bank works.
  • Security Checks: Very rarely, extra security checks might be needed, adding a few days.

While the official Freezone company creation is fast, opening a business bank account afterwards can sometimes take longer (2-4 weeks or more), so remember to plan for that.

Getting your license is a big step, but your responsibilities don’t end after Free Zone Business Setup in UAE. Here are the main things you need to keep doing:

• You must renew your business license every year before it runs out. Renewal fees typically range from AED 10,000 to AED 15,000.
• Register with the government tax office (FTA) and send in a yearly Corporate Tax report.
• If your business is registered for sales tax (VAT), you must send in VAT reports regularly (usually every three months) and pay any VAT you owe.
• If your company does certain “Relevant Activities” under ESR rules, you must send a yearly note along with a yearly report.
• Keep exact and up-to-date records of the main owners of your company.
• Visas for owners and employees must be renewed regularly (usually every 2 or 3 years).

Note: Starting from the financial year 2024, all Free Zone companies across the UAE are required to submit audited financial statements, regardless of their size or activity. These reports must be prepared and verified by an independent, registered audit firm to ensure compliance with UAE Corporate Tax regulations.

To properly cancel your license and avoid penalties, you must also obtain:

• Clearance certificates (from utilities, telecommunications, etc.)
• Visa cancellations (for all employees, dependents, and partners)
• A liquidation report issued by a licensed auditor (required by many Free Zones)

Keeping up with these things after setting up is super important to keep your Freezone business setup legal and in good shape.

Need help managing your post-setup compliance?

Contact Safe Ledger today, and we’ll ensure your Freezone company stays compliant, up-to-date, and penalty-free.

At Safe Ledger, we help you set up your business in UAE’s most popular Freezones, tailored to your business needs. Explore our detailed guides for each Freezone:

• Dubai Free Zone – Ideal for tech, trading, and general services, Dubai Free Zone Business Setup presents opportunities to open a business without physical overhead costs.
• International Free Zone Authority – Budget-friendly option, IFZA Business Setup is preferred for industries such as trading, e-commerce, and consulting.
• Abu Dhabi Free Zone – Best for finance, tech, and professional services, Abu Dhabi Free Zone Business Setup is one of the top-most preferred company setup options.
• Ras Al Khaimah Free Zone – Affordable and flexible for trading, industrial, and service companies, Ras Al Khaimah Free Zone Business Setup is a good cost-effective option.
• Sharjah Free Zone – Businesses belonging to manufacturing, trading, and warehousing can choose Sharjah Free Zone Business Setup option.
• Ajman Free Zone – Business Setup in Ajman Free Zone is considered one of the most budget-friendly option for small MSMEs and trading companies.
• Dubai Media City Free Zone – Perfect for media, advertising, and creative industries, Dubai Media City Free Zone Business Setup is rapidly growing among entrepreneurs interested in new sectors.
• Sharjah Airport International Free Zone – Ideal for logistics, trading, and industrial businesses, Sharjah Airport International Free Zone Business Setup presents an opportunity for a rapidly growing region in the UAE.

No matter your business type or budget, Safe Ledger guides you through the complete setup process and ensures compliance every step of the way.